Lottery's First Payment to Education Less Than Projected

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Lottery's First Payment to Education Less Than Projected

Special Report - October 1, 2006
Last week, North Carolina received its first payment from the state lottery towards education, but according to the Raleigh News and Observer, the $95 million deposited into the Education Lottery Fund was millions less than the amount projected for the first quarter by both lottery officials and state leaders. The deposit was the first of four payments the fund will receive from the North Carolina Lottery during the 2006-07 fiscal year. Lottery officials report that the lottery experienced $233.1 million in sales in the first quarter. According to the News and Observer, the lottery’s first quarter sales were around $50 million less than the amount projected earlier this year by Tom Shaheen, the executive director of the North Carolina Education Lottery. Shaheen has estimated that the lottery will bring about $400 million annually to education programs in the state, while state leaders, including Governor Mike Easley, have projected the lottery will raise $425 million a year for education. The legislature created a reserve fund to cover any shortfalls from lottery proceeds (that cannot exceed $50 million).

In a press release, Shaheen said, “We are extremely pleased by how sales have been going” and added that as new games are introduced, sales are expected to increase. Because slumping ticket sales are common in state lotteries over time, lottery officials continuously introduce new games to keep the public interested. In addition to introducing four new scratch off tickets, the North Carolina Lottery recently launched a daily pick 3 game, and lottery officials are set to unveil a daily pick 5 game later this month.

Although the lottery continues to be sold to the public as a reliable revenue source for education, only 35 percent of every dollar gambled on the lottery goes toward education. That 35 percent then has to be divided among several different education programs and 100 North Carolina counties. According to the Lottery Act passed last year by the General Assembly, of that 35 percent, 50 percent goes toward the More at Four program and reducing class sizes in public schools, 40 percent to school construction, and 10 percent toward college scholarships.

To read our policy papers on the negative impacts of the lottery click here.